) Identify a limitation of using gross domestic product (GDP) as a measure for development.
(1 point)
It doesn’t account for income distribution.
It overemphasizes health indictors such as life expectancy.
It overemphasizes environmental sustainability.
It doesn’t account for the value of services in the economy.
It doesn't account for income distribution.
The limitation of using gross domestic product (GDP) as a measure for development is that it doesn't account for income distribution.
The correct answer is: "It doesn’t account for income distribution."
While gross domestic product (GDP) is often used as a measure of development, it has several limitations. One major limitation is that GDP does not take into account income distribution within a country. This means that even if a country's GDP is high, it does not necessarily mean that the wealth is distributed evenly among its citizens. There could be a significant wealth disparity, with a small portion of the population controlling a large proportion of the wealth, while the majority of the population may still be struggling with poverty.
To identify this limitation, you need to have a basic understanding of GDP and its measurement. GDP measures the total value of all goods and services produced within a country's borders during a specific time period, usually a year. While it is a useful way to compare the economic activity of different countries, it does not provide information about how the wealth generated is distributed among the population.
To understand this limitation, you can think about a hypothetical scenario where a country has a high GDP due to the significant production of high-value goods and services. However, if the majority of the population does not benefit from this economic growth and the income disparity is substantial, then using GDP alone as a measure of development would not give an accurate representation of the overall well-being of the population.
To account for income distribution, other measures such as the Gini coefficient or the Human Development Index (HDI) may be used. These measures take into consideration factors such as income inequality, education, health, and standard of living to provide a more comprehensive understanding of development.